Gold dips but off 1-month lows as Thai buyers emerge

By Lewa Pardomuan

SINGAPORE (Reuters) - Gold dipped on Friday in trade thinned by holidays in key bullion centers in Asia but the metal held above a 1-month low hit the previous day, with dealers expecting bargain hunters to resurface at lower levels.

Gold XAU= eased to $916.60/917.40 an ounce from $920.30/921.10 ounce late in New York but off a 1-month low at $904.65 struck on Thursday when funds cashed in bullion to cover losses in other financial markets.

"It isn't clear whether this is a dead cat bounce or fresh buying signals. If $903 holds, sharp gains are possible in the coming sessions and we could even see levels beyond $970," said Pradeep Unni, analyst at Vision Commodities in Dubai.

Gold has lost around 11 percent in value since racing to an historical high of $1,030.80 an ounce on Monday. Markets in Singapore, Hong Kong, Australia and India are closed for Good Friday.

But in Thailand, one of Southeast Asia's main consumers, the physical market was abuzz with activity as investors took advantage of the price falls, hoping for better returns in the future with domestic interest rates seen falling soon.

"There have been so many buyers in the past couple of days. I never saw something like this before," Jiti Tangsitpakdi, head of Thai Gold Traders Association, told Business Radio.

"Our production can't catch up with the demand. Prices have come down a bit today and we already see buyers queuing up before the shops opened," said Jiti, referring to more than 100 gold shops around Bangkok's Chinatown and gold-trading centre.

Precious metals, oil, grains and agricultural products have tumbled this week in a wave of selling as funds cashed out, taking profits at record high prices.